30 
S. DEPARTMENT OF AGRICULTURE 
primarily a matter of splitting up the centralized stocks of goods that 
arrive annually in the wholesale markets into millions of separate 
small retail parcels for daily consumption. Any generally effective pro- 
gram for reducing the expense of distribution to city consumers must 
therefore take into consideration the basic proposition of reducing the 
expense on the individual retail sale. 
Establishment of the size of the individual retail sale as a deter- 
minant of distribution expense, and application of this principle to 
the distribution of perishable commodities supported by extensive 
statistical information, are results of far-reaching importance in 
marketing science. 
PERCENTAGE MARGINS OF COMMODITIES AND 
THEIR TOTAL RETAIL VALUES 
PERCENTAGE MARGIN 
CENTS PER CONSUMER'S DOLLAR 
100 80 60 40 20 
COMMODITY 
WHITE ONIONS 
N. CABBAGE 
S. CABBAGE 
W. LETTUCE 
SWEET POTATOES 
CANTALOUPES 
E. LETTUCE 
YELLOW ONIONS 
PEACHES 
5. POTATOES 
BBLD. APPLES 
BOXED APPLES 
CALIF ORANGES 
N. POTATOES 
TOTAL ANNUAL RETAIL VALUE, 1923 
MILLIONS OF DOLLARS 
4 8 12 16 20 24 
■ 
Pig. 12.— When commodities are arrayed according to their total 'annual retail values, the corre- 
sponding percentage margins lie generally in inverse order. The article with least annual value 
has the highest margin, and the commodity with greatest annual value has the lowest margin 
IMPLICATIONS IN COMMODITY DIFFERENCES * 
Certain theoretical implications are revealed in the analysis of commodity 
differences, whose interpretation in mathematical form will explain how the 
theory of a constant price spread per retail sale accounts for the contrasts in dis- 
tribution expense of different articles. 
INFLUENCE OF COMMON MONETARY AND PHYSICAL UNITS 
In the early part of the analysis of commodity differences, an inverse curvilinear 
relationship was discovered between percentage margins and total retail values 
in 1923, when these two magnitudes for the 14 commodities were plotted in a 
scatter diagram. The articles with the greater total retail values had generally 
lower percentages than those with lesser total retail values. The proportion 
absorbed by distribution expense varied somewhat inversely with the respective 
total commodity values, as is shown in Table 18 and Figure 12. The chart is a 
graphic presentation of the fact that when the series of articles is arrayed in 
ascending order according to total retail values in 1923 the corresponding per- 
centage margins lie in generally descending order. 
The analysis here presented was developed with the assistance of H. D. Comer. 
